PUBLIC SECTOR REFORMS IN FIJI: A CASE STUDY OF TELECOM FIJI LIMITED

Transcription

1 PUBLIC SECTOR REFORMS IN FIJI: A CASE STUDY OF TELECOM FIJI LIMITED by MAUREEN FATIAKI KARAN A thesis submitted in fulfillment of the requirements for the degree of Master of Commerce Copyright 2010 by Maureen Fatiaki Karan School of Management and Public Administration Faculty of Business and Economics The University of the South Pacific January, 2010

2 Declaration Statement by Author I, Maureen Fatiaki Karan, declare that this thesis is my own work and that, to the best of my knowledge, it contains no material previously published, or substantially overlapping with material submitted for the award of any other degree at any institution, except where due acknowledgement is made in the text. Maureen Fatiaki Karan S Date: Statement by Supervisor The research in this thesis was performed under my supervision and to my knowledge is sole work of Maureen Fatiaki Karan. Date: Dr. Anand Chand Senior Lecturer School of Management and Public Administration Faculty of Business and Economics

3 ACKNOWLEDGEMENTS I convey my sincere gratitude to my supervisor Dr. Anand Chand who inspired me with his discussions and committed guidance during the thesis writing process. He provided critical insights and debates about the restructure of the telecommunications industry. Among others I would like to thank Dr. Sereana Kubuabola for being a role model and source of inspiration, Dr. Mahendra Reddy for his help with data analysis, Dr Narendra Reddy for being an inspiring and supportive leader, as well as the respondents and workers of the Telecom Fiji Limited. I am thankful to my husband Mr. Hem Chand Dayal for his support and inspiration towards my studies. My father Deo Karan and mother Premila Karan and Mue Fatiaki for their hard work, dedication and for believing in me and making me what I am today. I would like to thank my brother Pene Fuata Karan for being there when I needed him. I am extremely grateful to the almighty God for guiding me throughout my thesis. I am also thankful to my many friends and relatives for their support and understanding. Finally I would like to thank my daughter Jyestha Dayal and my son Jai Keshav Dayal, for their understanding and patience. I dedicate this thesis to all my family and friends. iii

4 ABSTRACT Public enterprise reforms emerged in western European countries in 1980s and since then have taken their toll across the world. Fiji is no exception as it has gone through structural reforms and economic recession. Reforms in Fiji have been driven by both internal and external factors. Between 1990 and 1992 the corporatisation process started in four companies: Ika Corporation, Post and Telecommunications Department, Fiji Pine Commission and National Marketing Authority. The aim of this thesis was to investigate the reason why government wanted to restructure the Posts and Telecommunications Department, whether workers and their unions were taken into confidence during the restructure process, to assess critically the impact (both positive and negative) of such restructuring on the employees and the customers and to investigate whether cost effectiveness and customer efficiency was achieved. The research involved collecting data through questionnaire distribution, conducting personal interviews and document analysis. The research found that a lot of transactions took place for the personal gains of the ministers and Board members. The whole purpose for reforms was defeated as efficient customer service and cost effectiveness was not achieved. The Fiji National Provident Fund ended up paying three times the price of what Telecom Fiji Limited was worth. iv

5 The restructure program within Posts and Telecommunications Department began in 1990 and is still on-going. In the year 1990 the department was converted to Fiji Posts and Telecommunications Limited. In 1996, the two departments were further split into Post Fiji Limited and Telecom Fiji Limited. The Amalgamated Telecom Holdings was set up as the government was trying to get funds for the 1999 general elections and cover up for the Fiji National Bank bankruptcy. The thesis shows that apart from external pressures there was a lot of political interference in the day to day running of the organisation. During the restructuring of the telecommunications industry the workers and their unions were not taken into confidence and integrated into the process of enterprise reorganisation. There was a lot of industrial strife and misunderstanding among the stake holders; the union, management and staff. This cost the company millions of dollars. Basic premise of the government in undertaking the public enterprise reorganisation was to make the telecommunications industry more responsive to the needs of the customers as well as retain the efficient employees and hence enhancing the performance of the organisation. The research findings highlighted that neither was customer service improved nor was employee job satisfaction achieved. Employees that were more skilled were the ones who took the voluntary redundancy packages and Telecommunications Fiji limited was left with more unskilled labor force thus the company was forced to rehire staff at a much higher pay rate. Most customers were not satisfied and even though new technologies were introduced and customer satisfaction index did not increase. v

7 TABLE OF CONTENTS DECLARATION... ii ACKNOWLEDGEMENTS... iii ABSTRACT... iv TABLE OF CONTENTS... 1 Chapters CHAPTER 1 Introduction Aim and Objectives of this study Scope of this Study Usefulness of Study Limitations of the Study Organization of this thesis...11 CHAPTER 2 Methodologies 2.1 Introduction Autobiography about the Researcher Research Design Population Sample Data Analysis Research Limitations and Problems Ethical Considerations Conclusion 28 CHAPTER 3 Literature Review 3.1 Introduction Background Global Outlook of Public Enterprise Reforms The Public Enterprise Reform Process The Drive for and Benefits of Privatization Rationale behind Public Enterprises being Restructured Public Enterprise Reforms In Developing Countries Public Enterprise Reforms in the South Pacific Public Enterprise Reforms in Fiji Debate for and against Privatization Ministry of Public Enterprises in Fiji and its Role Fiji Public Enterprises Act: (2006) Conclusion 50 vii

12 Chapter 1 Introduction Public enterprise reforms have gained a global perspective over the last few decades. This has drawn the attention of both policy makers and academics. There have been wider implications of such reforms for the people working in them as well as the society, accompanied by the inefficiency and lowered productivity of many public enterprises along with the increasing global competition and rapidly changing technologies. This has intensified the need to improve the performance and competitiveness of the public enterprises all over the world. 1.1 Aim and Objectives of this Study The specific aims and objectives are: 1 to examine critically the earlier and current restructuring stages of Telecom Fiji Ltd 2 to investigate the extent to which the workers and their unions were taken into confidence and integrated into the process of enterprise reorganisation. 3 to assess critically the impact (both positive and negative) of such restructuring on the employees and the customers. 4 to evaluate critically the basic premise of the government in undertaking the public enterprise reorganisation. 5. to develop a model that allows for reform objectives to materialise 6. to investigate whether cost effectiveness and customer efficiency was achieved. 1.2 Scope of this Study Examination of the public sector reform issue in Fiji would require a comprehensive review hence it is imperative to narrow this study down to a precise topic that is manageable. Public sector reform is defined as changes in the role, activities and performance of the executive arm of the State, particularly in regard to institutions, policies and management (Richard et. al, 2003). 1

13 The focus of this thesis will be on the first form of reform that is Public Sector Reform. The thesis will base its study on the restructure of a public enterprise. This will be illustrated via the case study of Telecom Fiji Limited. 1.3 Usefulness of Study The thesis is useful in two ways. First, by examining the restructure program that took place in the Fiji Telecommunications industry we can learn a lot about Public Sector Reform in Fiji. We can understand the impact it has on the stakeholders such as employees, trade unions, management, and customers. Second, this research is unique as the telecom industry in Fiji has a monopoly status in providing telecom services and has a different industrial setting when compared to the industries investigated in previous local studies/ theses. The significance of this study lies in its timeliness when the entire public sector in Fiji is being subjected to reform and restructuring processes. This study will address many concerns of stakeholders on the restructuring of public enterprises in Fiji. Further, this study contributes towards the calls made for more studies in Fiji. Sharma and Lawrence (2002) and Narayan (2004) mention that there is a necessity to conduct more studies since there have been few empirical studies in this area especially in the developing economies like Fiji. Since the enactment of the Public Enterprises Act (1996), the reform process is still very much in the making and with the pro-reform nature of the current regime in Fiji, this research is timely. Research conducted by Chand (1999) on Inland Revenue Department and Customs and Excise Department. Nath (2000) study was on Housing Authority. They both focused on performance management systems in the public sector and not the process of reform itself. The case study selected for this thesis aims to investigate the nature of restructuring in Telecom Fiji Limited and assess the extent of stakeholder participation in the restructuring process. 2

14 1.4 Limitations of the Study The limitations of the study are as follows: first, not all Telecom Managers were willing to reveal information about the restructure process. Second, only limited funds were allocated for the research to be carried out. Third, the research focuses on a single example Telecom Fiji Limited and further studies of other institutions which have gone through Public Sector Reforms will be necessary before any comparisons and generalizations can be made. 1.5 Organisation of this thesis This thesis is organised in eight chapters. The first chapter introduces the subject, the aims and objectives, the scope of this research and outlines the usefulness of the study. The second chapter focuses on the research methodology for this study. It stipulates and rationalises the qualitative and quantitative research methods used. In addition, it explains the recording, verification and analysis of the data collected and the research limitations and problems encountered during the research period. Chapter 3 gives a global and national overview of public enterprise reform process with a discussion of the related literature review. Chapter 4 provides a background to public sector reforms in Fiji and the Fiji Telecommunications industry. Chapter 5 examines the reform process within Telecom Fiji Limited. Chapter 6 discusses the industrial relations and human resource issues of the case study. It gives in detail the industrial relations proceedings that occurred during the restructure process. Chapter 7 address matters relating to critical analysis of the data collected and discussion. 3

15 Chapter 8 provides the conclusion and recommendations. An illustration of the organisation of the thesis is presented in Figure 1.1 Figure 1.1 Illustration of the organisation of Thesis Chapter 1 Introduction Chapter 2 Methodology Chapter 3 Literature Review Chapter 4 Background to public sector reform in TFL Chapter 5 Process of restructure within Telecom Chapter 6 Industrial Relations issues at Telecom Chapter 7 Findings, Analysis and Discussion Chapter 8 Summary & Conclusion 1.6 Conclusion The chapter introduced the thesis topic and discussed the aims and objectives as well as the scope of the study. The usefulness and limitations of the study were outlined as well. The next chapter examines the methodology for this research. 4

16 Chapter 2 Methodology 2.1 Introduction This chapter will examine the research methodology for this study. This study will use both qualitative and quantitative research methods. It will further stipulate and rationalise the qualitative and quantitative research methods used. In addition, it will explain the recording, verification and analysis of the data collected and concedes the research limitations and problems encountered during the research period. This study is about the restructure of the department of post and telecom, the role unions played and how restructure affected employees and customer service over the years. This research project used both qualitative and quantitative approaches that supported an in-depth case study analysis. It is based on a survey of 200 customers along the Nausori-Suva corridor. Surveys were also conducted on 500 employees to get a better picture of how restructuring affected their work lives. The research process involved the use of a structured interview schedule and semi-structured interviews that were conducted across a broad range of stakeholders associated with the telecommunications sector. This allowed for flexibility to incorporate and develop new ideas as the research progressed. 2.2 Autobiographical details about the researcher This study reflects the experiences and knowledge I acquired that inspired me to take up this case of the restructuring of Telecom Fiji Limited. I have been tutoring at the University of the South Pacific for the past 3 years. At USP I have taught public sector management, management applications and human resource management. I have gained experience and learned a lot from teaching and interacting with students from twelve different countries in the region. Teaching management courses for three years with the major focus being on the public sector and human resources, the challenges that were posed to the government organisations and the impact these had on employees captured my interest. In terms of industrial experiences, I have worked for a private firm, Tappoo Group of companies as a marketing and human resource officer. 5

17 This provided me with an insight into how private firms operate and maximise profits. Later, I joined TransTel Fiji Limited, which is a subsidiary of Telecom Fiji Limited. TransTel had ventured into a new business area electronic pin distribution. I was hired to manage a team of five people in the beginning, which later grew into a team of fifteen young and enthusiastic workers. Working within TransTel led to some observations such as that even though TransTel was operating on its own there was a lot of bureaucracy. There was backlog in decision-making due to the interference of Telecom Fiji Limited upper management staff. Then there was the issue of restructuring and this led to the employees morale being low and this very much affected productivity since everyone was worried about their future within the organisation. There was also a lot of pressure on minimising cost and focusing on effectiveness and efficiency. These experiences and observations have helped me to understand and later motivated me to carry out a study on how restructuring impacted on employees, productivity of the organisation, unions and the customers. I chose Telecom Fiji Limited as my case since it was a monopoly and had lately hired Mr. Joe Mar who is referred to as an agent of change. The other reason for choosing to study the telecommunications industry was because I had worked at Telecom Fiji Limited during the reform process and this assisted me in understanding and shaping the research questions which included staff morale and commitment. This thesis was completed on a part-time basis by the researcher. 2.3 Research Design A research design is a plan that links the data to be collected to the initial questions of the study (Yin, 1989a: 18). The design will include: Aims, methodology, strategies for collecting, analyzing and interpreting observations and the time and resource constraints within which a researcher operates (Walsh, 2005: 175). Planning a research design would depend on the scope of the research and the nature of data required. Flick (2002) clarify that the research design is created by the researcher, is moulded (rather than dictated) by the method, and is responsive to the context and the participants (Flick, 2002:98). 6

18 The research design was formulated during the first few months of 2006 after I read the literature on various researches conducted in the past in different countries. The planning and organising for the fieldwork was done during this period. As an exemployee of TransTel, I was able to develop a trustful relationship with the employees of Telecom Fiji Limited. Hence, I was able to interview employees, managers and the trade union. All of these were of great help in designing this study. This assisted me in developing relevant questions that were directly linked to the aims and objectives of my study. The diagram below summarises the research process that the author used as a guideline to complete the thesis. Figure 2.1 Different Stages of Research Process Source:http://images.google.com.fj/imgres?imgurl=http://www.chronicpoverty.org/CPToolbox/images _and_files/research_process_z.gif&imgrefurlhl%3den%26lr%3d (accessed on 23 rd August 2006) * Diagram was modified by the author. 7

19 2.3.1 Type of Research Methods For the purpose of this study both qualitative and quantitative research methods have been used. Qualitative Research is defined as any kind of research that produces findings not arrived at by means of statistical procedures or other means of quantification (Strauss and Corbin, 1990: 17). Qualitative researchers tend to seek illumination, understanding, and extrapolation to similar situations and so qualitative analysis results in a different type of knowledge than does quantitative inquiry. Qualitative methods facilitate study of issues in depth and detail. In a qualitative approach, the researcher is the instrument (Patton, 1990:15) and thus the credibility of the study depends to a great extent on the skills and competence of the researcher. According to Patton (1990), qualitative data describe. In comparison to qualitative research, quantitative research is succinct, parsimonious, and easily aggregated for analysis; quantitative data are systematic, standardized, and easily presented in a short space. In order to achieve the aims and objectives, an analytical (a single institutional case study of Telecom Fiji Ltd) approach will be used. An inductive strategy will be followed in the study, which will commence with data collection, followed by data analysis and then the formation of generalisations Case Study Approach Yin (1993) presented Giddens view that considered case methodology microscopic because it lacked a sufficient number of cases. Hamel (Hamel et al., 1993) and Yin (1994) forcefully argue that the relative size of the sample whether 2, 10, or 100 cases are used, does not transform a multiple case into a macroscopic study. The goal of the study should establish the parameters, and then should be applied to all research. In this way, even a single case could be considered acceptable, provided it met the established objective. 8

20 2.3.3 Validity and Reliability As in all research, consideration must be given as to how to ensure validity, internal validity, external validity, and reliability (Yin, 1989a). Yin (1994) suggest using multiple sources of evidence as the way to ensure construct validity. The current study will use multiple sources of data gathering: survey instruments, interviews, and documents. Walsh further explains: Validity tests the extent to which variables reflect the concepts intended, and that research results are what they claim to be. Reliability tests the extent to which different operationalisations of the same concept produce consistent results. (2005:105). External validity, or credibility in qualitative terms, is the extent to which experimental findings are generalisable to other settings, subject populations, and time periods. (Singleton, Straits & Straits, 1993: 516). Internal validity on the other hand tests the extent to which causal propositions are supported by the evidence and argument (Walsh, 2005:105). Moreover, objectivity, in simple terms, refers to the absence of subjective judgments. Yin (1994) makes the following suggestions for attaining greater reliability: outlining the reasons for research stating the major questions that are to be addressed establishing a positive rapport with the participants, and consciously trying to eliminate any possible causes of unreliability. The study will also use multiple sources of evidence employees, management and unions. Yin (1994) provides the assertion that external validity could be achieved from theoretical relationships and from these generalisations could be made. It is the development of a formal case study protocol that provides the reliability that is required of all research. For the purpose of this study validity was achieved through triangulation, which is discussed next. 9

21 2.3.4 Triangulation Case study is known as a triangulated research strategy. Stake (1995) asserted that triangulation can occur with data, investigators, and theories and even methodologies. The protocols that are used to ensure accuracy and alternative explanations are called triangulation. The need for triangulation arises from the ethical need to confirm the validity of the processes. In case studies this could be done by using multiple sources of data (Yin, 1984). Denzin (1984) identifies four types of triangulation: data source triangulation, when the researcher looks for the data to remain the same in different contexts; investigator triangulation, when several investigators examine the same phenomenon; theory triangulation, when investigators with different view points interpret the same results; and methodological triangulation, when one approach is followed by another, to increase confidence in the interpretation. For the research purposes of this case study data source triangulation will be used to get validity in results and to reduce biasness. Past employees, management staff, current employees, trade union officials and customers were interviewed to get validity in results. Yin (1989b) identifies the following advantages of triangulation: allows researchers to be more confident of results can stimulate creative methods, new ways to capture a problem can help uncover the deviant or off-quadrant dimension of a phenomenon can lead to enriched explanations of research problems can lead to a synthesis or integration of theories can serve as a test of completing theories (because of its comprehensiveness) Research Questions The research will investigate questions associated with public enterprise reforms in Fiji and in this case it will be Telecom Fiji Limited: 10

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